Less Is More

Zions Bank gains by consolidating on common platforms.

For Zions Bancorporation, 2004 was a banner year in its three-year effort to achieve greater systems consolidation. "It has improved our ability to implement change at an accelerated rate and support the environment more cost effectively," says Mike DeVico, EVP, technology and operations, Zions Bancorporation.

But the consolidation effort isn't over yet. We're "beginning to consolidate different implementations of technology that perform similar or like functions," says DeVico. "An example would be our Internet, call center and branch sales and service technology." Zions has selected S1 Corp. (Atlanta) to help it reach this goal. "Most banks today have different solutions in each of those channels, and we're looking to bring them all together," relates DeVico.

Channel Surfing

Both the bank branch and the Internet remain an important part of Zions' plans for 2005. "We're going to continue to see double-digit growth in our Internet channel," predicts DeVico. "However, branches will continue to be important to us and will continue to get their fair share of the investment pie."

DeVico expects moderate growth in the company's IT budget, which actually masks some fundamental changes in how those dollars are to be deployed. "We are, in some cases, moving from outsourced to insourced, so there's a transfer of expense from direct to internal costs, which changes the dynamics a little bit," he notes.

Also, the savings generated from consolidation will help to fund new revenue opportunities. "As we become more efficient, which is clearly what's happening, we're redistributing some of that capital to new investments," says DeVico.

Through its NetDeposit subsidiary, Zions has been quite active in the development of new payment and reporting services enabled by Check 21 and image exchange. Zions also has a subsidiary called Providus that offers a tool that supports compliance with section 404 of the Sarbanes-Oxley Act. "It allows you to document and track risks, mitigating controls and the testing of those controls," relates DeVico.

These tools are used within the bank, as well. "It puts us in a position where it's a straightforward exercise to justify to the regulators that we are in compliance," notes DeVico.

All of the aforementioned consolidation projects have also had a benefit in terms of risk management, in that there are fewer moving parts and fewer points of compromise.